Whistle-blowing complaints: substance not form?

In an article first published by Thomson Reuters, Managing Associate, Annabel Mackay, reflects on recent trends in the whistle-blowing arena and considers the recent EAT decisions in Morgan v Royal MENCAP Society and Kilraine v London Borough of Wandsworth.

As whistleblowers' champions oversee the implementation of firms' whistle-blowing frameworks in compliance with the Financial Conduct Authority (FCA) and Prudential Regulation Authority (PRA) September 2016 deadline, it is worth reflecting on recent trends.

In the regulatory context, a broad definition of "reportable concerns" has been adopted which is not limited to "protected disclosures" and covers any concern about the firm's activities. When bringing Employment Tribunal complaints, the technical requirements for a "protected disclosure" must still be satisfied. Recent cases however demonstrate the difficulty of striking out whistle-blowing complaints and that some of the technical requirements for a "protected disclosure" are not as onerous as was once thought.

Morgan v Royal MENCAP Society

In Morgan v Royal MENCAP Society, the Employment Appeal Tribunal (EAT) considered an appeal against the decision to strike out a claimant's claim on the basis that her disclosures could not be matters of public interest in the claimant's reasonable belief.

The claimant had expressed concern that cramped working conditions were affecting her injured knee. She claimed that she had raised concerns with the assistant service manager and via completion of a "safeguarding reporting form". In response to a request for further and better particulars of her disclosures, she said: "The public ought to know about charities who behave in this manner and operate under a culture of bullying. Some of them paint a glossy picture on their websites asking for donations, but the public should know exactly how some of these charities treat [their] employees, and the type of charity they are financially supporting."

She added that her health and safety complaints were made in the public interest as the subject matter also presented a threat to the health and safety of others. It is easy to imagine similar arguments being run in respect of financial services firms (with the alleged protected disclosure examined against the backdrop of a firm's values and public image).

The Employment Tribunal struck out the claim on the grounds that the claimant had no reasonable prospect of success in demonstrating that her disclosures, while "highly relevant" to her, were matters of public interest in her reasonable belief.

The EAT acknowledged that the threshold for striking out a claim was high and should be exercised with particular caution in complaints of discrimination and whistle-blowing to avoid injustice.

In North Glamorgan NHS Trust v Ezsias, the Court of Appeal held that: "it would only be in an exceptional case that an application to an Employment Tribunal will be struck out as having no reasonable prospect of success when the central facts are in dispute. An example might be where the facts sought to be established by the applicant were totally and inexplicably inconsistent with the undisputed contemporaneous documentation." Such cases are extremely rare.

The EAT noted that: "where there is a dispute of fact, unless there are very strong reasons for concluding that the claimant's view of the facts is simply unsustainable, a resolution of that conflict of fact is likely to be required before the case can be dismissed without a hearing."

Having considered the case law on the power to strike out a claim, the EAT considered the public interest test: "the question is not whether the disclosure is actually in the public interest but whether the worker making it has the belief and whether the belief is reasonable". This was a question of fact which meant that "what was reasonable in one case may not be regarded as reasonable in another."

The EAT considered the case of Chesterton v Nurmohamed where the claimant had raised concerns about accounting which impacted on his commission arrangements and those of other managers. The respondent argued that the claimant's complaint about cramped working conditions could be distinguished as it did not relate to a group of employees but focused on her own predicament. The EAT disagreed. Taking the claimant's case at its highest, she asserted a belief that others might be affected by the working conditions and identified how the public interest test was engaged in a number of ways.

A hearing was required to examine whether the claimant had a reasonable belief that she had raised a matter of public interest, having regard to the nature of her belief, the way in which other workstations were organised and how other employees might be affected.

In that respect, the EAT's findings demonstrate the high threshold for strike out of whistle-blowing complaints and the extent to which the surrounding facts will be examined to test whether the claimant had the relevant belief and whether such belief was reasonably held. It also demonstrates the importance of the current interpretation of the public interest test (with its focus on reasonable belief) as outlined in Chesterton, which is subject to an appeal later in the year.

Kilraine v London Borough of Wandsworth

Another recent Employment Appeal Tribunal case, Kilraine v London Borough of Wandsworth considered the requirement for the claimant to make a disclosure of information, having regard to the key case on this subject, Cavendish Munro v Geduld.

In Cavendish, a distinction was drawn between conveying information and making an allegation: "Communicating "information" would be "The wards have not been cleaned for the past two weeks. Yesterday, sharps were left lying around". Contrasted with that would be the statement that: "you are not complying with health and safety requirements".

In Kilraine, the EAT noted that this dichotomy between an information and allegation was not contained within the statute itself and said: "It would be a pity if tribunals were too easily seduced into asking whether it was one or the other when reality and experience suggest that very often information and allegation are intertwined".

In that case, the fourth alleged protected disclosure concerned an email which described a meeting on a specified date where the claimant reported an interaction with her manager. The EAT acknowledged that it made an allegation, but found that it also gave information about what was or was not said at the meeting.

The complaint ultimately failed to qualify for protection on other grounds but the EAT's demonstrates that as long as a complaint conveys information, the fact that it also makes an allegation does not matter.

Comment

These two cases are interesting because they show the difficulties respondents face when attempting to strike out whistle-blowing complaints and the way in which other technical challenges (based on the public interest test and/or the need to have a disclosure of information) will be received.

In that respect, the broad focus of the FCA and the PRA rules is helpful because firms are required to have procedures in place to handle a broad range of disclosures, regardless of whether or not they would qualify for protection at law. This framework also emphasises the importance of preventative steps to guard against victimisation of whistleblowers, with the whistleblowers' champion overseeing the effectiveness of such procedures.

It remains to be seen whether these rules will reduce the number of Employment Tribunal complaints being brought in the financial services sector for whistle-blowing detriment and dismissal and the need for respondents to deploy a range of technical arguments to defend such claims.